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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ascent Solar Technologies Inc (PK) | USOTC:ASTI | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.00 | 9.60 | 11.00 | 0.00 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
20-3672603
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
12300 Grant Street, Thornton, CO
|
|
80241
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of exchange on which registered
|
Common
|
ASTI
|
OTC
|
Large accelerated filer
|
|
o
|
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
x
|
|
Smaller reporting company
|
|
x
|
|
|
|
|
Emerging growth company
|
|
o
|
|
|
|
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
•
|
Our limited operating history and lack of profitability;
|
•
|
Our ability to develop demand for, and sales of, our products;
|
•
|
Our ability to attract and retain qualified personnel to implement our business plan and corporate growth strategies;
|
•
|
Our ability to develop sales, marketing and distribution capabilities;
|
•
|
Our ability to successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators, distributors, retailers and e-commerce companies, who deal directly with end users in our target markets;
|
•
|
The accuracy of our estimates and projections;
|
•
|
Our ability to secure additional financing to fund our short-term and long-term financial needs;
|
•
|
Our ability to maintain the listing of our common stock on the OTCBB Market;
|
•
|
The commencement, or outcome, of legal proceedings against us, or by us, including ongoing ligation proceedings;
|
•
|
Changes in our business plan or corporate strategies;
|
•
|
The extent to which we are able to manage the growth of our operations effectively, both domestically and abroad, whether directly owned or indirectly through licenses;
|
•
|
The supply, availability and price of equipment, components and raw materials, including the elements needed to produce our photovoltaic modules;
|
•
|
Our ability to expand and protect the intellectual property portfolio that relates to our consumer electronics, photovoltaic modules and processes;
|
•
|
Our ability to implement remediation measures to address material weaknesses in internal control;
|
•
|
General economic and business conditions, and in particular, conditions specific to consumer electronics and the solar power industry; and
|
•
|
Other risks and uncertainties discussed in greater detail in the section captioned "Risk Factors."
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
ASSETS (substantially pledged)
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
50,907
|
|
|
$
|
18,159
|
|
Trade receivables, net of allowance of $45,794 and $45,644, respectively
|
|
55,616
|
|
|
165,160
|
|
||
Inventories, net
|
|
677,920
|
|
|
660,791
|
|
||
Prepaid expenses and other current assets
|
|
182,422
|
|
|
138,369
|
|
||
Total current assets
|
|
966,865
|
|
|
982,479
|
|
||
Property, Plant and Equipment:
|
|
36,621,187
|
|
|
36,621,187
|
|
||
Less accumulated depreciation and amortization
|
|
(32,256,329
|
)
|
|
(32,207,829
|
)
|
||
|
|
4,364,858
|
|
|
4,413,358
|
|
||
Other Assets:
|
|
|
|
|
||||
Patents, net of accumulated amortization of $381,385 and $363,533, respectively
|
|
846,708
|
|
|
862,429
|
|
||
Other non-current assets
|
|
33,123
|
|
|
34,061
|
|
||
|
|
879,831
|
|
|
896,490
|
|
||
Total Assets
|
|
$
|
6,211,554
|
|
|
$
|
6,292,327
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,915,926
|
|
|
$
|
2,318,655
|
|
Related party payables
|
|
270,052
|
|
|
270,740
|
|
||
Accrued expenses
|
|
1,714,667
|
|
|
1,562,435
|
|
||
Accrued interest
|
|
1,224,772
|
|
|
1,198,279
|
|
||
Notes payable
|
|
1,516,530
|
|
|
1,516,530
|
|
||
Current portion of long-term debt
|
|
354,885
|
|
|
349,093
|
|
||
Secured promissory notes, net of discount of $2,672,928 and $2,824,365, respectively
|
|
4,379,969
|
|
|
3,447,380
|
|
||
Promissory notes, net of discounts of $55,000 and $104,583, respectively
|
|
1,121,937
|
|
|
1,239,854
|
|
||
Convertible notes, net of discounts of $665,631 and $394,011, respectively
|
|
1,990,805
|
|
|
1,852,722
|
|
||
Embedded derivative liability
|
|
5,118,128
|
|
|
10,114,452
|
|
||
Total current liabilities
|
|
19,607,671
|
|
|
23,870,140
|
|
||
Long-term debt, net of current portion
|
|
4,938,046
|
|
|
5,028,969
|
|
||
Accrued Warranty Liability
|
|
27,839
|
|
|
29,114
|
|
||
Total Liabilities
|
|
24,573,556
|
|
|
28,928,223
|
|
||
Commitments and Contingencies
|
|
—
|
|
|
—
|
|
||
Stockholders’ Deficit:
|
|
|
|
|
||||
Series A preferred stock, $.0001 par value; 750,000 shares authorized as of March 31, 2019 and December 31, 2018; 48,100 and 60,756 shares issued and outstanding as of March 31, 2019 and December 31, 2018 ($663,121 and $822,620 Liquidation Preference, respectively)
|
|
5
|
|
|
6
|
|
||
Common stock, $0.0001 par value, 20,000,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 322,543,901 and 63,537,885 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
|
|
32,255
|
|
|
6,354
|
|
||
Additional paid in capital
|
|
396,896,969
|
|
|
395,889,712
|
|
||
Accumulated deficit
|
|
(415,291,231
|
)
|
|
(418,531,968
|
)
|
||
Total stockholders’ deficit
|
|
(18,362,002
|
)
|
|
(22,635,896
|
)
|
||
Total Liabilities and Stockholders’ Deficit
|
|
$
|
6,211,554
|
|
|
$
|
6,292,327
|
|
|
|
|
||||||
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Revenues
|
|
$
|
215,384
|
|
|
$
|
377,511
|
|
Costs and Expenses
|
|
|
|
|
||||
Cost of revenues (exclusive of depreciation shown below)
|
|
91,436
|
|
|
273,028
|
|
||
Research, development and manufacturing operations (exclusive of depreciation shown below)
|
|
489,063
|
|
|
1,173,035
|
|
||
Selling, general and administrative (exclusive of depreciation shown below)
|
|
508,375
|
|
|
934,591
|
|
||
Depreciation and amortization
|
|
66,352
|
|
|
101,712
|
|
||
Total Costs and Expenses
|
|
1,155,226
|
|
|
2,482,366
|
|
||
Loss from Operations
|
|
(939,842
|
)
|
|
(2,104,855
|
)
|
||
Other Income/(Expense)
|
|
|
|
|
||||
Interest Expense
|
|
(2,826,248
|
)
|
|
(1,343,730
|
)
|
||
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net
|
|
7,006,827
|
|
|
(984,461
|
)
|
||
Total Other Income/(Expense)
|
|
4,180,579
|
|
|
(2,328,191
|
)
|
||
Net Income (Loss)
|
|
$
|
3,240,737
|
|
|
$
|
(4,433,046
|
)
|
|
|
|
|
|
||||
Net Income (Loss) Per Share (Basic)
|
|
$
|
0.02
|
|
|
$
|
(0.40
|
)
|
Net Income (Loss) Per Share (Diluted)
|
|
$
|
0.001
|
|
|
$
|
(0.40
|
)
|
Weighted Average Common Shares Outstanding (Basic)
|
|
139,241,521
|
|
|
10,996,379
|
|
||
Weighted Average Common Shares Outstanding (Diluted)
|
|
3,591,903,040
|
|
|
10,996,379
|
|
|
|
Common Stock
|
|
Series A Preferred Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Total
Stockholders’ Equity (Deficit) |
||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||
Balance, December 31, 2018
|
|
63,537,885
|
|
|
$
|
6,354
|
|
|
60,756
|
|
|
$
|
6
|
|
|
$
|
395,889,712
|
|
|
$
|
(418,531,968
|
)
|
|
$
|
(22,635,896
|
)
|
Interest and Dividend Expense paid with Common Stock
|
|
17,938,692
|
|
|
1,794
|
|
|
—
|
|
|
—
|
|
|
83,817
|
|
|
—
|
|
|
85,611
|
|
|||||
Conversion of St.George Note into Common Shares
|
|
58,503,244
|
|
|
5,850
|
|
|
—
|
|
|
—
|
|
|
100,900
|
|
|
—
|
|
|
106,750
|
|
|||||
Conversion of Global Ichiban Note into Common Shares
|
|
9,595,327
|
|
|
960
|
|
|
—
|
|
|
—
|
|
|
114,040
|
|
|
—
|
|
|
115,000
|
|
|||||
Conversion of BayBridge Note into Common Shares
|
|
46,461,277
|
|
|
4,646
|
|
|
—
|
|
|
—
|
|
|
85,854
|
|
|
—
|
|
|
90,500
|
|
|||||
Conversion of Bellridge Note into Common Shares
|
|
36,166,781
|
|
|
3,617
|
|
|
—
|
|
|
—
|
|
|
61,999
|
|
|
—
|
|
|
65,616
|
|
|||||
Conversion of PowerUp Note into Common Shares
|
|
90,340,694
|
|
|
9,034
|
|
|
—
|
|
|
—
|
|
|
173,466
|
|
|
—
|
|
|
182,500
|
|
|||||
Conversion of Series A Preferred Stock into Common Stock
|
|
1
|
|
|
—
|
|
|
(12,656
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Loss on Extinguishment of Liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
382,834
|
|
|
—
|
|
|
382,834
|
|
|||||
Stock based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,346
|
|
|
—
|
|
|
4,346
|
|
|||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,240,737
|
|
|
3,240,737
|
|
|||||
Balance, March 31, 2019
|
|
322,543,901
|
|
|
$
|
32,255
|
|
|
48,100
|
|
|
$
|
5
|
|
|
$
|
396,896,969
|
|
|
$
|
(415,291,231
|
)
|
|
$
|
(18,362,002
|
)
|
|
|
Common Stock
|
|
Series A Preferred Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Total
Stockholders’ Equity (Deficit) |
||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||
Balance, December 31, 2017
|
|
9,606,677
|
|
|
$
|
961
|
|
|
60,756
|
|
|
$
|
6
|
|
|
$
|
387,292,174
|
|
|
$
|
(402,495,476
|
)
|
|
$
|
(15,202,335
|
)
|
Interest and Dividend Expense paid with Common Stock
|
|
81,242
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
20,709
|
|
|
—
|
|
|
20,717
|
|
|||||
Conversion of St.George Note into Common Shares
|
|
187,500
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
74,981
|
|
|
—
|
|
|
75,000
|
|
|||||
Conversion of Global Ichiban Note into Common Shares
|
|
2,450,980
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
1,249,755
|
|
|
—
|
|
|
1,250,000
|
|
|||||
Conversion of BayBridge Note into Common Shares
|
|
411,765
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
104,959
|
|
|
—
|
|
|
105,000
|
|
|||||
Loss on Extinguishment of Liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
433,375
|
|
|
—
|
|
|
433,375
|
|
|||||
Stock based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,324
|
|
|
—
|
|
|
14,324
|
|
|||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,433,046
|
)
|
|
(4,433,046
|
)
|
|||||
Balance, March 31, 2018
|
|
12,738,164
|
|
|
$
|
1,274
|
|
|
60,756
|
|
|
$
|
6
|
|
|
$
|
389,190,277
|
|
|
$
|
(406,928,522
|
)
|
|
$
|
(17,736,965
|
)
|
|
|
As of March 31,
|
|
As of December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Building
|
|
$
|
5,828,960
|
|
|
$
|
5,828,960
|
|
Furniture, fixtures, computer hardware and computer software
|
|
489,421
|
|
|
489,421
|
|
||
Manufacturing machinery and equipment
|
|
30,302,806
|
|
|
30,302,806
|
|
||
Depreciable property, plant and equipment
|
|
36,621,187
|
|
|
36,621,187
|
|
||
Less: Accumulated depreciation and amortization
|
|
(32,256,329
|
)
|
|
(32,207,829
|
)
|
||
Net property, plant and equipment
|
|
$
|
4,364,858
|
|
|
$
|
4,413,358
|
|
|
|
As of March 31,
|
|
As of December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Raw materials
|
|
$
|
677,920
|
|
|
$
|
660,791
|
|
Work in process
|
|
—
|
|
|
—
|
|
||
Finished goods
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
677,920
|
|
|
$
|
660,791
|
|
2019
|
$
|
263,962
|
|
2020
|
$
|
372,843
|
|
2021
|
$
|
398,209
|
|
2022
|
$
|
425,301
|
|
2023
|
$
|
454,235
|
|
Thereafter
|
$
|
3,378,381
|
|
|
$
|
5,292,931
|
|
|
|
Global Ichiban
|
|
St. George
|
|
Total
|
||||||
Secured Notes Principal Balance at December 31, 2017
|
|
$
|
4,557,227
|
|
|
$
|
—
|
|
|
$
|
4,557,227
|
|
New notes
|
|
1,935,000
|
|
|
1,315,000
|
|
|
3,250,000
|
|
|||
Note conversions
|
|
(1,426,000
|
)
|
|
—
|
|
|
(1,426,000
|
)
|
|||
Interest converted to principal
|
|
140,518
|
|
|
—
|
|
|
140,518
|
|
|||
Note assignments
|
|
(250,000
|
)
|
|
—
|
|
|
(250,000
|
)
|
|||
Secured Notes Principal Balance at December 31, 2018
|
|
4,956,745
|
|
|
1,315,000
|
|
|
6,271,745
|
|
|||
Less: remaining discount
|
|
(2,012,698
|
)
|
|
(811,667
|
)
|
|
(2,824,365
|
)
|
|||
Secured Notes, net of discount, at December 31, 2018
|
|
2,944,047
|
|
|
503,333
|
|
|
3,447,380
|
|
|||
New notes
|
|
—
|
|
|
725,000
|
|
|
725,000
|
|
|||
Note conversions
|
|
(115,000
|
)
|
|
—
|
|
|
(115,000
|
)
|
|||
Interest converted to principal
|
|
171,152
|
|
|
—
|
|
|
171,152
|
|
|||
Secured Notes Principal Balance at March 31, 2019
|
|
5,012,897
|
|
|
2,040,000
|
|
|
7,052,897
|
|
|||
Less: remaining discount
|
|
(1,608,345
|
)
|
|
(1,064,583
|
)
|
|
(2,672,928
|
)
|
|||
Secured Notes, net of discount, at March 31, 2019
|
|
$
|
3,404,552
|
|
|
$
|
975,417
|
|
|
$
|
4,379,969
|
|
Conversion Period
|
Principal Converted
|
Interest Converted
|
Common Shares Issued
|
|||||
Q1 2018
|
$
|
1,250,000
|
|
$
|
—
|
|
2,450,981
|
|
Q2 2018
|
$
|
176,000
|
|
$
|
—
|
|
1,035,295
|
|
Q1 2019
|
$
|
115,000
|
|
$
|
—
|
|
9,595,327
|
|
|
$
|
1,541,000
|
|
$
|
—
|
|
13,081,603
|
|
Closing Date
|
Closing Amount
|
Maturity Date
|
||
11/30/2017
|
$
|
250,000
|
|
11/30/2018
|
12/28/2017
|
$
|
250,000
|
|
12/28/2018
|
1/11/2018
|
$
|
250,000
|
|
1/11/2019
|
1/25/2018
|
$
|
250,000
|
|
1/25/2019
|
2/8/2018
|
$
|
250,000
|
|
2/8/2019
|
2/21/2018
|
$
|
250,000
|
|
2/21/2019
|
3/7/2018
|
$
|
250,000
|
|
3/7/2019
|
3/21/2018
|
$
|
250,000
|
|
3/21/2019
|
Derivative Liability Balance as of December 31, 2018
|
$
|
3,533,861
|
|
||
Change in fair value of derivative liability
|
(1,858,961
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
1,674,900
|
|
1)
|
The first valuation was done on the
November 30, 2017
note with term of
three
years. The derivative value of this note was
$1,764,068
as of
December 31, 2018
.
|
2)
|
The second valuation was done on the group of notes dated
November 30, 2017
, that had a term of
one
year. The derivative value of this group of notes was
$418,965
as of
December 31, 2018
.
|
3)
|
The third valuation was done on the note dated
December 28, 2017
, which had a term of
one
year. The derivative value of this note was
$150,126
on
December 31, 2018
.
|
4)
|
The fourth valuation was done for the notes dated in the first quarter of 2018, which had a term of
one year
. The derivative value of this note was
$900,757
on
December 31, 2018
.
|
5)
|
The fifth valuation was done for the notes dated in the fourth quarter of 2018, which had a term of
one year
. The derivative value of this note was
$299,945
on
December 31, 2018
.
|
2)
|
For the
November 30, 2017
1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
72%
present value discount rate of
12%
and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a net gain of
$296,790
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$122,175
as of
March 31, 2019
.
|
3)
|
For the December 28, 2017 1yr note: Management conducted a fair value assessment with the following assumptions: annual volatility of
72%
, present value discount rate of
12%
, and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a net gain of
$106,347
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$43,779
as of
March 31, 2019
.
|
4)
|
For the first quarter 2018 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
72%
, present value discount rate of
12%
, and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a net gain of
$638,085
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$262,672
as of
March 31, 2019
.
|
5)
|
For the fourth quarter 2018 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
50%
, present value discount rate of
12%
, and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a net gain of
$295,411
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$4,534
as of
March 31, 2019
.
|
Closing Date
|
Closing Amount
|
Proceeds
|
||||
11/7/2018
|
$
|
260,000
|
|
$
|
200,000
|
|
11/19/2018
|
$
|
120,000
|
|
$
|
100,000
|
|
11/30/2018
|
$
|
120,000
|
|
$
|
100,000
|
|
12/7/2018
|
$
|
120,000
|
|
$
|
100,000
|
|
12/17/2018
|
$
|
120,000
|
|
$
|
100,000
|
|
1/3/2019
|
$
|
120,000
|
|
$
|
100,000
|
|
1/17/2019
|
$
|
120,000
|
|
$
|
100,000
|
|
1/30/2019
|
$
|
120,000
|
|
$
|
100,000
|
|
2/8/2019
|
$
|
120,000
|
|
$
|
100,000
|
|
Closing Date
|
Closing Amount
|
Proceeds
|
||||
3/15/2019
|
$
|
125,000
|
|
$
|
100,000
|
|
3/22/2019
|
$
|
120,000
|
|
$
|
100,000
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
3,292,692
|
|
||||
Additional derivative liability on new notes
|
1,467,197
|
|
|||||
Change in fair value of derivative liability
|
(2,471,594
|
)
|
|||||
Derivative Liability Balance as of March 31, 2019
|
$
|
2,288,295
|
|
1)
|
The first valuation was done on the
May 8, 2018
note with term of one year. The derivative value of this note was
$1,568,730
as of
December 31, 2018
.
|
2)
|
The second valuation was done on the
November 5, 2018
notes with term of one year. The derivative value of this note was
$1,723,962
as of
December 31, 2018
. For the tranches of this note that were received in Q1 2019, the Company conducted an initial valuation. Although the notes were entered into at various dates, we used a weighted average date of January 22, 2019 for a combined valuation purpose. Management's analysis, using the following assumptions: annual volatility of
79%
, present value discount rate of
12%
, and a dividend yield of
0%
, resulted in a fair value of the embedded derivative associated with these Notes of
$469,686
as of January 22, 2019. The fair value of the derivative was greater than the face value at issuance and the difference of
$69,686
was charged to interest expense at issuance. The remaining debt discount of
$400,000
will be charged to interest expense ratably over the life of the note.
|
3)
|
The third valuation was done on the
March 13, 2019
notes with a term of one year. For the Q1 2019 tranches received, the Company conducted an initial valuation. Although the notes were entered into at various dates, we used a weighted average issuance date of March 18, 2019 for a combined valuation purpose. Management's analysis, using the following assumptions: annual volatility of
80%
, present value discount rate of
12%
, and a dividend yield of
0%
, resulted in a fair value of the embedded derivative associated with these Notes of
$997,511
as of March 18, 2019. The fair value of the derivative was greater than the face value at issuance and the difference of
$797,511
was charged to interest expense at issuance. The remaining debt discount of
$200,000
will be charged to interest expense ratably over the life of the note.
|
1)
|
For the May 2018 note: Management conducted a fair value assessment with the following assumptions: annual volatility of
35%
, present value discount rate of
12%
, and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a gain of
$1,291,447
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$277,283
as of
March 31, 2019
.
|
2)
|
For the
November 5, 2018
notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
92%
, present value discount rate of
12%
, and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a gain of
$607,408
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$1,586,240
as of
March 31, 2019
.
|
3)
|
For the
March 13, 2019
notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
82%
, present value discount rate of
12%
, and a dividend yield of
0%
as of
March 31, 2019
. As a result of the fair value assessment, the Company recorded a gain of
$572,739
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$424,772
as of
March 31, 2019
.
|
|
Investor 1
|
Investor 2
|
Total
|
||||||
Promissory Notes Principal Balance at December 31, 2017
|
$
|
494,437
|
|
$
|
200,000
|
|
$
|
694,437
|
|
New notes
|
—
|
|
850,000
|
|
850,000
|
|
|||
Notes exchanged
|
—
|
|
(200,000
|
)
|
(200,000
|
)
|
|||
Promissory Notes Principal Balance at December 31, 2018
|
494,437
|
|
850,000
|
|
1,344,437
|
|
|||
Less: remaining discount
|
—
|
|
(104,583
|
)
|
(104,583
|
)
|
|||
Promissory Notes, net of discount, at December 31, 2018
|
$
|
494,437
|
|
$
|
745,417
|
|
$
|
1,239,854
|
|
New notes
|
—
|
|
67,500
|
|
67,500
|
|
|||
Notes exchanged
|
—
|
|
(235,000
|
)
|
(235,000
|
)
|
|||
Promissory Notes Principal Balance at March 31, 2019
|
494,437
|
|
682,500
|
|
1,176,937
|
|
|||
Less: remaining discount
|
—
|
|
(55,000
|
)
|
(55,000
|
)
|
|||
Promissory Notes, net of discount, at March 31, 2019
|
$
|
494,437
|
|
$
|
627,500
|
|
$
|
1,121,937
|
|
|
Principal Balance 12/31/2017
|
New Notes
|
Notes assigned or exchanged
|
Notes converted
|
Principal Balance 12/31/2018
|
Less: Discount Balance
|
Net Principal Balance 12/31/18
|
||||||||||||||
October 2016 Notes
|
$
|
330,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
330,000
|
|
$
|
—
|
|
$
|
330,000
|
|
St. George Notes
|
1,705,833
|
|
—
|
|
—
|
|
(606,600
|
)
|
1,099,233
|
|
(96,177
|
)
|
1,003,056
|
|
|||||||
BayBridge Notes
|
565,000
|
|
—
|
|
270,000
|
|
(772,500
|
)
|
62,500
|
|
(62,100
|
)
|
400
|
|
|||||||
Bellridge Notes
|
—
|
|
150,000
|
|
550,000
|
|
(245,000
|
)
|
455,000
|
|
(123,360
|
)
|
331,640
|
|
|||||||
Power Up Notes
|
—
|
|
225,000
|
|
—
|
|
—
|
|
225,000
|
|
(110,621
|
)
|
114,379
|
|
|||||||
EMA Note
|
—
|
|
75,000
|
|
—
|
|
—
|
|
75,000
|
|
(1,753
|
)
|
73,247
|
|
|||||||
|
$
|
2,600,833
|
|
$
|
450,000
|
|
$
|
820,000
|
|
$
|
(1,624,100
|
)
|
$
|
2,246,733
|
|
$
|
(394,011
|
)
|
$
|
1,852,722
|
|
|
Principal Balance 12/31/2018
|
New Notes
|
Notes assigned or exchanged
|
Notes converted
|
Principal Balance 3/31/2019
|
Less: Discount Balance
|
Net Principal Balance 3/31/19
|
||||||||||||||
October 2016 Notes
|
$
|
330,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
330,000
|
|
$
|
—
|
|
$
|
330,000
|
|
St. George Notes
|
1,099,233
|
|
—
|
|
—
|
|
(106,750
|
)
|
992,483
|
|
—
|
|
992,483
|
|
|||||||
BayBridge Notes
|
62,500
|
|
—
|
|
310,000
|
|
(90,500
|
)
|
282,000
|
|
(269,500
|
)
|
12,500
|
|
|||||||
Bellridge Notes
|
455,000
|
|
—
|
|
—
|
|
(65,615
|
)
|
389,385
|
|
(64,359
|
)
|
325,026
|
|
|||||||
Power Up Notes
|
225,000
|
|
107,000
|
|
—
|
|
(182,500
|
)
|
149,500
|
|
(104,547
|
)
|
44,953
|
|
|||||||
EMA Note
|
75,000
|
|
—
|
|
(75,000
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Widjaja Note
|
—
|
|
330,000
|
|
—
|
|
—
|
|
330,000
|
|
(164,725
|
)
|
165,275
|
|
|||||||
GS Capital Notes
|
—
|
|
108,068
|
|
75,000
|
|
—
|
|
183,068
|
|
(62,500
|
)
|
120,568
|
|
|||||||
|
$
|
2,246,733
|
|
$
|
545,068
|
|
$
|
310,000
|
|
$
|
(445,365
|
)
|
$
|
2,656,436
|
|
$
|
(665,631
|
)
|
$
|
1,990,805
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
876,481
|
|
||
Additional derivative liability on new notes
|
—
|
|
|||
Change in fair value of derivative liability
|
(481,408
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
395,073
|
|
Conversion Period
|
Principal Converted
|
Common Shares Issued
|
|||
Q1 2018
|
$
|
75,000
|
|
187,500
|
|
Q2 2018
|
$
|
316,600
|
|
2,082,778
|
|
Q3 2018
|
$
|
102,500
|
|
3,142,333
|
|
Q4 2018
|
$
|
112,500
|
|
10,437,046
|
|
Q1 2019
|
$
|
106,750
|
|
58,503,244
|
|
|
$
|
713,350
|
|
74,352,901
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
1,060,000
|
|
||
Change in fair value of derivative liability
|
(909,567
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
150,433
|
|
Conversion Period
|
Principal Converted
|
Interest Converted
|
Common Shares Issued
|
|||||
Q4 2018
|
$
|
207,500
|
|
$
|
4,303
|
|
16,008,198
|
|
Q1 2019
|
$
|
90,500
|
|
$
|
3,278
|
|
47,400,806
|
|
|
$
|
298,000
|
|
$
|
7,581
|
|
63,409,004
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
113,846
|
|
||
Additional derivative liability on new notes
|
310,640
|
|
|||
Change in fair value of derivative liability
|
(134,553
|
)
|
|||
Liability extinguished
|
(113,846
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
176,087
|
|
Conversion Period
|
Principal Converted
|
Interest Converted
|
Common Shares Issued
|
|||||
Q3 2018
|
$
|
137,500
|
|
$
|
2,104
|
|
3,715,476
|
|
Q4 2018
|
$
|
107,500
|
|
$
|
4,000
|
|
7,554,399
|
|
Q1 2019
|
$
|
65,615
|
|
$
|
4,507
|
|
38,696,339
|
|
|
$
|
310,615
|
|
$
|
10,611
|
|
49,966,214
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
486,279
|
|
||
Liability extinguished
|
(43,521
|
)
|
|||
Change in fair value of derivative liability
|
(376,119
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
66,639
|
|
Conversion Period
|
Principal Converted
|
Interest Converted
|
Common Shares Issued
|
|||||
Q1 2019
|
$
|
182,500
|
|
$
|
7,300
|
|
95,014,902
|
|
|
$
|
182,500
|
|
$
|
7,300
|
|
95,014,902
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
511,137
|
|
||
Additional derivative liability on new notes
|
130,653
|
|
|||
Liability extinguishment
|
(417,591
|
)
|
|||
Change in fair value of derivative liability
|
(31,240
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
192,959
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
240,156
|
|
||
Liability extinguishment
|
(240,156
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
—
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
—
|
|
||
Additional derivative liability on new notes
|
219,634
|
|
|||
Change in fair value of derivative liability
|
(93,463
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
126,171
|
|
Derivative Liability Balance as of December 31, 2018
|
$
|
—
|
|
||
Additional derivative liability on new notes
|
101,063
|
|
|||
Derivative liability assigned
|
240,156
|
|
|||
Change in fair value of derivative liability
|
(293,647
|
)
|
|||
Derivative Liability Balance as of March 31, 2019
|
$
|
47,572
|
|
Preferred Stock Series Designation
|
Shares Authorized
|
Shares Outstanding
|
||
Series A
|
750,000
|
|
48,100
|
|
Series B-1
|
2,000
|
|
—
|
|
Series B-2
|
1,000
|
|
—
|
|
Series C
|
1,000
|
|
—
|
|
Series D
|
3,000
|
|
—
|
|
Series D-1
|
2,500
|
|
—
|
|
Series E
|
2,800
|
|
—
|
|
Series F
|
7,000
|
|
—
|
|
Series G
|
2,000
|
|
—
|
|
Series H
|
2,500
|
|
—
|
|
Series I
|
1,000
|
|
—
|
|
Series J
|
1,350
|
|
—
|
|
Series J-1
|
1,000
|
|
—
|
|
Series K
|
20,000
|
|
—
|
|
|
|
For three months ended March 31,
|
|
For three months ended March 31,
|
||||
|
|
2019
|
|
2018
|
||||
Research and development
|
|
$
|
—
|
|
|
$
|
454
|
|
Selling, general and administrative
|
|
$
|
4,346
|
|
|
$
|
13,870
|
|
Total share-based compensation cost
|
|
$
|
4,346
|
|
|
$
|
14,324
|
|
|
|
For three months ended March 31,
|
|
For three months ended March 31,
|
||||
|
|
2019
|
|
2018
|
||||
Type of Award:
|
|
|
|
|
||||
Stock Options
|
|
$
|
4,346
|
|
|
$
|
14,324
|
|
Restricted Stock Units and Awards
|
|
$
|
—
|
|
|
$
|
—
|
|
Total share-based compensation cost
|
|
$
|
4,346
|
|
|
$
|
14,324
|
|
|
|
Stock
Option Shares |
|
Weighted
Average Remaining Contractual Life in Years |
|
Outstanding at December 31, 2017
|
|
195
|
|
|
7.32
|
Granted
|
|
—
|
|
|
|
Exercised
|
|
—
|
|
|
|
Canceled
|
|
(85
|
)
|
|
|
Outstanding at December 31, 2018
|
|
110
|
|
|
5.18
|
Granted
|
|
—
|
|
|
|
Exercised
|
|
—
|
|
|
|
Canceled
|
|
(13
|
)
|
|
|
Outstanding at March 31, 2019
|
|
97
|
|
|
5.18
|
Exercisable at March 31, 2019
|
|
92
|
|
|
5.13
|
•
|
Our ability to generate customer acceptance of and demand for our products;
|
•
|
Successful ramping up of commercial production on the equipment installed;
|
•
|
Our products are successfully and timely certified for use in our target markets;
|
•
|
Successful operating of production tools to achieve the efficiencies, throughput and yield necessary to reach our cost targets;
|
•
|
The products we design are saleable at a price sufficient to generate profits;
|
•
|
Our ability to raise sufficient capital to enable us to reach a level of sales sufficient to achieve profitability on terms favorable to us;
|
•
|
Effective management of the planned ramp up of our domestic and international operations;
|
•
|
Our ability to successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators, distributors, retailers and e-commerce companies, who deal directly with end users in our target markets;
|
•
|
Our ability to maintain the listing of our common stock on the OTCBB Market;
|
•
|
Our ability to implement remediation measures to address material weaknesses in internal control;
|
•
|
Our ability to achieve projected operational performance and cost metrics;
|
•
|
Our ability to enter into commercially viable licensing, joint venture, or other commercial arrangements; and
|
•
|
Availability of raw materials.
|
1.
|
Personnel and facility related expenses decreased approximately
$670,340
, as compared to the same time period of
2018
. The decrease in personnel and facility related costs was primarily due to a reduction in headcount and the use of contractors.
|
2.
|
Materials and equipment related expenses, decreased approximately
$13,632
, as compared to the same time period of
2018
. The decrease was due to a decrease in production of research and development products.
|
1.
|
Personnel and facility related costs decreased
$345,813
during the
three months ended
March 31, 2019
, as compared to the the
three months ended
March 31, 2018
. The overall decrease in personnel related costs was primarily due a lower headcount for the the
three months ended
March 31, 2019
, as compared to the the
three months ended
March 31, 2018
as well as the decreased use of consultants and contractors during the same period.
|
2.
|
Marketing and related expenses decreased
$1,292
during the
three months ended
March 31, 2019
, as compared to the the
three months ended
March 31, 2018
. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the the
three months ended
March 31, 2019
, compared to the same time period of
2018
, which is the direct result of reducing our marketing budget to focus more on the development of our PV.
|
3.
|
Legal expenses decreased
$141,843
during the
three months ended
March 31, 2019
, as compared to the the
three months ended
March 31, 2018
. The primary reasons for the decrease is due to decreased general legal expenses related to financing efforts as compared to the the
three months ended
March 31, 2018
and decreases in legal expenses related to our patent activity as compared to the same period of
2018
.
|
4.
|
Public company expenses increased
$22,072
during the
three months ended
March 31, 2019
, as compared to the the
three months ended
March 31, 2018
. This increase is primarily due to increased filing fees related to financing agreements in
2019
, as compared to
2018
.
|
5.
|
Bad debt and settlement expenses decreased approximately
$40,660
during the
three months ended
March 31, 2019
, as compared to the
three months ended
March 31, 2018
. During
2018
we recorded payments and settlements against existing reserves. We did not have settlement expenses during
2019
.
|
1.
|
Interest expense increased approximately
$1,482,518
, as compared to the year ended
March 31, 2018
. The increase is primarily due to an increase of non-cash interest expense related to convertible debt and promissory notes.
|
2.
|
Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, was a net gain of
$7,006,827
for the
three months ended
March 31, 2019
, as compared to a net loss of
$984,461
for the
three months ended
March 31, 2018
. The change of
$7,991,288
in this non-cash item is attributable to a net gain of
$6,694,074
on the change in fair value of our embedded derivative instruments during the
three months ended
March 31, 2019
, compared to a net gain
$551,086
in
2018
, offset by a reduction in the loss from extinguishment of liabilities of
$746,128
, related to conversions and redemptions of certain convertible notes and preferred stock, for the
three months ended
March 31, 2019
, as compared to the the
three months ended
March 31, 2018
.
|
|
Change to Net Income from (Net Loss)
For the Three Months Ended
March 31, 2019
Compared to the Three Months Ended
March 31, 2018
|
||
Revenues
|
$
|
162,127
|
|
Cost of Revenue
|
181,592
|
|
|
Research, development and manufacturing operations
|
|
||
Materials and Equipment Related Expenses
|
13,632
|
|
|
Personnel and Facility Related Expenses
|
670,340
|
|
|
Selling, general and administrative expenses
|
|
||
Personnel, Administrative, and Facility Related Expenses
|
345,813
|
|
|
Marketing Related Expenses
|
1,292
|
|
|
Legal Expenses
|
141,843
|
|
|
Public Company Costs
|
(22,072
|
)
|
|
Bad Debt Expense
|
(40,660
|
)
|
|
Depreciation and Amortization Expense
|
35,360
|
|
|
Other Income/Expense
|
|
||
Interest Expense
|
1,482,518
|
|
|
Other Income/Expense
|
—
|
|
|
Non-Cash Change in Fair Value of Derivative Liabilities and (Gain)/Loss on Extinguishment of Liabilities, net
|
(7,991,288
|
)
|
|
Change to net income from net loss
|
$
|
7,673,783
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
•
|
The Company was understaffed and did not have sufficiently trained resources with the technical expertise to ensure that all company transactions were accounted for in accordance with GAAP. This deficiency arose primarily from staff turnover and the inability of the Company to devote sufficient replacement resources in a timely manner, as a result of the Company's financial situation
|
•
|
Accounting for the Company's inventory and cost of revenue was lacking for the preparation of the March 31, 2019 financial statements. Miscalculations in these areas could impact the Company's current assets, revenues, operating results, and cash flows.
|
•
|
The Company plans to engage a resource, either as internal staff or an external contractor, with the technical expertise to track and report on inventory transactions and cost of revenue calculations.
|
•
|
The Company will design and implement additional procedures in order to assure that the resource mentioned above and other audit/accounting personnel are more involved with the Company’s inventory activities and cost of revenue allocations to monitor and earlier identify accounting issues that may be raised by the Company’s ongoing activities.
|
Exhibit No.
|
|
Description
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
Exhibit No.
|
|
Description
|
|
ASCENT SOLAR TECHNOLOGIES, INC.
|
|
|
|
|
|
By:
|
/
S
/ VICTOR LEE
|
|
|
Lee Kong Hian (aka Victor Lee)
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
|
1 Year Ascent Solar Technologies (PK) Chart |
1 Month Ascent Solar Technologies (PK) Chart |
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